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POTTSTOWN, PA — School taxes may not rise next year if the school board approves a budget that raises them 2.9 percent this year, Superintendent Jeff Sparagana said Thursday night.

That was when the proposed $56.4 million Pottstown Schools budget got its first public airing — although few members of the public were in attendance — before the school board’s finance committee.

“This is not the year to tie our hands,” Sparagana told the finance committee.

Pointing to the $1.5 million in additional debt payments that begin this year to pay for the elementary school renovations; the additional $1.1 in retirement/pension payments and the $625,000 the district needs to start setting aside annually for roof replacements, Sparagana said the administration can balance the budget “without cutting programs and hurting students” with the additional $856,000 a 2.9 percent tax hike generates.

Manheim Township school board Thursday agreed to limit any tax increase in next year’s budget to 1.7 percent and approved a five-year contract with superintendent Gene Freeman.

The employment agreement, which runs through June 2018, will pay Freeman in excess of $1 million in salary and compensation over five years, making him the highest-paid superintendent in Lancaster County.

The vote on Freeman’s contract was unanimous, as was the vote to keep a possible tax rate increase for 2013-14 at or below the school district’s Act 1 index of 1.7 percent.

That vote marks a return to form for the district, which had stayed within its state-mandated index every year since 2006 until 2011-12, when it boosted taxes by 3.96 percent in the face of a revenue shortfall of about $4.7 million.

A panel of three judges Wednesday rejected Scranton‘s petition for a 1 percent wage tax on the nearly 23,000 nonresidents who work in the city but live elsewhere.

The city may make up the resulting budget shortfall next year by borrowing more next year than had been anticipated or selling an unspecified city asset, Mayor Chris Doherty said.

In their 50-page ruling, Lackawanna County Judges Terrence Nealon and Robert Mazzoni and visiting Pike County Judge Harold Thomson stated the city failed to prove its case for a 1 percent earned income tax on the 22,655 nonresidents working in the city.

The city failed to pass a required hurdle of having “substantially implemented” a revised recovery plan, by failing to fulfill two revenue generators in that plan. Those included failing to obtain a commitment from a lender for a lease-back borrowing measure to be undertaken next year; and failing to obtain commitments from nonprofit entities for significantly increased donations, according to the ruling.

Editor’s note: Pennsylvania did NOT make this list….you may be surprised by some of the states that did!

The Great Recession pinched state governments, forcing them to be less generous with local communities which, in turn, had less to spend on students, police and programs for the poor.

For nearly three decades, local governments could count on a steady increase in money from their two biggest funding sources — the states and property taxes.

That changed in 2009 and 2010, when local governments took in less from both sources, according to a report last month from the Pew American Cities Project. The funding shortfall has forced many cities, towns, counties and school districts to tighten their belts.

24/7 Wall St identified the eight states making the steepest cuts in funding to local governments. The website’s analysis of data from the Center on Budget and Policy Priorities and the U.S. Census Bureau suggests that these states were having their own budget problems as tax receipts shriveled in an anemic economy.

SCRANTON, PA – The Lackawanna County Court set a hearing date more than a month away on Mayor Chris Doherty’s lawsuit to get his financial recovery plan implemented, effectively increasing pressure on the mayor and city council to resolve the issue through negotiations.

The Aug. 3 court date allows council solicitor Boyd Hughes the legally required time to respond to the city’s lawsuit, a court official said. The suit asks the court to order the mayor’s recovery plan implemented or to order a council vote on it.

But with the city running out of money, facing increasingly impatient creditors and the mayor unilaterally slashing 398 employees’ pay to the federal minimum wage of $7.25 an hour to save money, the far-off court hearing date at least temporarily dashed hopes for a quick resolution.

“It can’t wait until August,” city Councilman Bob McGoff said by telephone after the hearing. “I think what it means is that the mayor and the council president need to get together before Aug. 3.”

Gov. Tom Corbett’s Budget Secretary, Charles Zogby, said today state revenues are on track to miss projections that the current budget was built on by $500 million this fiscal year.

That revenue shortfall, Zogby said, has led Corbett to task him with drawing up options for a mid-year freeze on some state spending to try to keep the overall $27.1 billion general fund budget in balance. He also said it creates a scenario in which there will likely be scant resources for any spending increases in fiscal year 2012-13, which begins July 1.

The United States Postal Service just ended their fiscal year on September 30th. During that time period, the USPS lost $5.1 BILLION. The only reason this figure was not $10.6 BILLION is because new legislation allowed the USPS to delay a $5.5 billion payment to a retiree health benefit fund.

The USPS needs to cut another $20 billion by 2015 to move back into the black. On the table are more post office closings, dropping Saturday delivery, taking on non-mail related business and reducing retiree health costs.

The USPS saw their income drop about $1.4 billion dollars over the previous year.